IMAX Plans To Fully Acquire Chinese Subsidiary For $124M

Imax Corp IMAX disclosed a proposal to acquire 96.3 million shares in its Hong Kong-listed subsidiary, IMAX China, for around HK$10 per share in cash ($124 million).

The offer represents around 49% premium to the 30-trading day average closing price. 

Post-buyout, IMAX will fully own IMAX China, and Daniel Manwaring will continue as IMAX China's CEO.

The acquisition will offer the company increased flexibility to drive growth opportunities and applications of IMAX technology in the Chinese market. 

The transaction is expected to close later this year and be immediately accretive to IMAX. 

The deal is expected to unlock annual public company cost savings of around $2 million and tax efficiencies. 

"This deal is a win-win for IMAX Corporation and IMAX China, as it unlocks significant financial benefits for IMAX while offering IMAX China investors a meaningful premium to current market prices. The public listing of IMAX China raised capital to help fuel a period of tremendous growth for IMAX in China, and this transaction has the potential to usher in a new era of expansion for our brand and technology in this thriving market for entertainment," said Rich Gelfond, CEO of IMAX. 

As of March 31, 2023, the company held $99 million in cash and equivalents and had $280 million available for borrowing under the credit facility.

Price Action: IMAX shares closed lower by 0.70% at $17.08 on Wednesday.